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#666496 - 01/16/07 04:30 PM Waiving Exec Officer OD fees
Love those Regs Offline
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Joined: Apr 2002
Posts: 292
Southern State
Is there ever a time / reason that would justify waiving OD fees of an executive officer? What about this - the board fees were paid later than normal so the E.O. went into OD. Ligitimate? It only gets worse when you see that the E.O. is in OD every month and with this one exception pays the fees charged everyone else.
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General Discussion
#666499 - 01/16/07 04:34 PM Re: Waiving Exec Officer OD fees Love those Regs
#Just Jay Offline
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#Just Jay
Joined: Oct 2006
Posts: 14,390
Cheeseheadland
So he wrote checks without first confiming the deposit was in his account?

Would you reverse fees for your rank and file customers for this reason?

I say WHAMMY!! No refund, verify balance before writing checks.
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#666723 - 01/16/07 07:31 PM Re: Waiving Exec Officer OD fees #Just Jay
SavannahOne Offline
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Joined: Sep 2005
Posts: 1,163
Georgia
Alternative - Document that the bank would waive OD fees for employees if payroll was delayed without notice due to bank error, correlate payroll as being essentially the same as Board fees and thereby document it is equally appropriate to waive the OD fees in this case.

Secondary consideration - We do not pay executive officers board fees (even if they are also board members) as they are expected to attend board meetings as a function of their position. To pay salary and board fees for the same meeting is considered douple-dipping into the compensation trough.

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#667677 - 01/18/07 03:38 AM Re: Waiving Exec Officer OD fees SavannahOne
MN Banker Offline
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Joined: Aug 2006
Posts: 980
I believe it's actually a violation of Reg O to waive an overdraft fee on an executive officer or directors account. It's also a violation for him/her to have ODs every month unless he/she has some type of sweep or OD line of credit.

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#667743 - 01/18/07 02:41 PM Re: Waiving Exec Officer OD fees MN Banker
SavannahOne Offline
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Joined: Sep 2005
Posts: 1,163
Georgia
Inadvertant overdrafts are not a violation. It is my opinion it could reasonably be argued this OD was inadvertant (subject to the dollar limitation) IF the bank changed its normal deposit date/process without notification to the Directors.

That said, if the bank deposit is random, then the overdraft was not due to a process change at the bank and thus probably not inadvertant.

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#667790 - 01/18/07 03:25 PM Re: Waiving Exec Officer OD fees SavannahOne
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,293
Galveston, TX
I have to agree with MN Banker. The original poster indicated "when you see that the E.O. is in OD every month". That does not constitute "inadvertent". Charge him the fee and get him a OD line of credit. Your bank and the EO is asking for trouble from the regulators.
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#668055 - 01/18/07 06:20 PM Re: Waiving Exec Officer OD fees rlcarey
SavannahOne Offline
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Joined: Sep 2005
Posts: 1,163
Georgia
I understood it that the EO was being charged for the other overdrafts, but that s/he was saying this particular one was inadvertant. I still think that's possible, but MN's suggestion is certainly less open to question as it is the more conservative approach.

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#669018 - 01/19/07 08:01 PM Re: Waiving Exec Officer OD fees SavannahOne
MN Banker Offline
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Posts: 980
You can pay an inadvertant overdraft, but you cannot waive the OD charge. Look at 215.4(e)

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